Oyo LayOffs: Will this Strategy Help?

15 Jan 2020  Read 845 Views

Oyo is reportedly laying off 20% of its employees! WIll this move help Oyo's operations?  Can Ritesh Agrawal turnaround Oyo's future with this strategy? Well, Read and find out below.

An athlete once cramped his right foot while running. Though the athlete was in immense pain, he thought to himself that he would recover soon, since it is nothing new for athletes to get cramped. For a few days it pained a lot and showed no signs of healing. So, he wasn’t even able to walk properly. It pained so much that for once, he thought of getting his right foot surgically removed!

One would agree that getting the foot removed completely might get him rid of immense pain. But, is this the right solution? We and you would surely not agree. But, probably Oyo will! You’ll be shocked to know that the company is straightaway laying off 20% of its staffers reportedly by this week.

What’s the Matter?

Oyo has been struggling since last two years or so. The struggle has not only been in terms of profitability but, operational as well. Remember the Smart Mornings on hotels breaking ties with Oyo? Most of the issues were mentioned in that edition.

A reputed media house has reported that around 2400 employees of Oyo might be laid off by this week. This is a re-sizing exercise aimed at bringing the headcount down by 20%. This would help in optimizing the operational costs for Oyo. But, wouldn’t this affect the already struggling service quality? Read further and decide.

The ‘Oyo’ Blues

You would have definitely heard of ‘Monday Blues’. These Monday blues appeared in literal sense for the employees of Oyo as they received a saddening mail from their Founder Ritesh Agarwal. This was an internal e-mail that hinted lay offs from mid-management, business development, sales & operations and select Technology teams (as reported by Economic Times).

Just think about the employees’ mindset when they would have received this communication. They’ve been asked to look for careers outside Oyo. However, Oyo hasn’t clarified anything yet and any official validation is yet to be received. But, the employees would be feeling devastated and think about their morale with which they would continue their work.

What Lies Ahead?

After laying off 20% employees, will the situation improve for Oyo? Most likely not. Because, reportedly this is just the first phase of re-sizing and re-structuring. Yes, another phase would most likely be carried out by the end of March. Who would have expected this from a unicorn like Oyo? The business model of Oyo has been unique and we’re hoping all positives for the great Ritesh Agrawal.

Looks like India’s issue of rising unemployment is going to get worse. We’re saying so because, if this move works in favour of Oyo then its competitors and other companies (that might be struggling with profitability) might also think of implementing this. But, if not, then would it open up the industry for new entrants or would the existing players benefit? We’ll have to be a silent spectator in this case and wait for the time to answer this.

Hope you liked this information. Comment below with your opinions/suggestions. Should you wish to stay updated and would like to receive relevant financial news and analysis straight in your inbox, subscribe Smart Mornings. 

About the Author: Ratan Deep Singh | 146 Post(s)

Ratan is a Biotechnology graduate and a former print-media Journalist, who specialized in marketing to take up Brand Communication. He’s a grammar Nazi & big-time foodie who appreciates creativity and often tries his hand in creative poetic writing.

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